How One Man Turned Overlooked Assets Into a Life-Changing Gift

Overlooked assets can have a huge impact on giving, both to the giver and to the organization.

“This dog’ll hunt!” Those were the words of Ben Thompson*, a faithful giver to American Bible Society, after I showed him a gift plan that would not only increase his impact in giving, but also create some considerable tax breaks for his family.

Ben had a problem. This fine southern gentleman farmer is a loyal supporter of American Bible Society, his church and several other organizations. But his desire to see people around the world receive the Bible in their own language overwhelmed him. Yet he was stuck, hemmed in by the limitations of the assets from which he gives, which are mainly cash and income. It frustrated him entirely that he could only do so much, and anything more would cause a severe reduction in his monthly budget.

I had the privilege of talking with Ben out on his back porch late one afternoon. As we sipped sweet iced tea, he told me of his situation. He also started talking about his property. Although he had retired from a professional career, he and his wife also lived on a farm where they had dabbled in raising horses and growing hay and corn. It was mainly a hobby for him, but he enjoyed the hard work and being outside. He knew he wouldn’t be able to continue to own the land indefinitely, as this area of town was being swallowed up by developers and property taxes were rising. He had already been approached by developers a few times.

Of the land he was not using regularly, there was an additional 135 acres that fronted a highway on the backside of his property. I asked him if he ever thought about using that land to increase his giving. He hadn’t given it much thought. “It just sits there … it really should have more purpose than that,” he said.

So, I talked him through a gift plan that would involve giving away that parcel of 135 acres to a Donor Advised Fund. I explained that a Donor Advised Fund is a tax free entity, so he could transfer the property to the fund and take a tax deduction. I further explained that each year, he and his wife would advise the fund on how the annual earnings would be used for gifts. His eyes began to light up, knowing that he could establish a fund that would make annual gifts to his chosen charities.

But, when I explained the additional tax advantages, he got even more excited. This new fund would be able to sell the 135 acres to a developer, not triggering a capital gains tax! And, because the fund itself is not included in their estate, it is not subject to Federal Estate Taxes!

Based on the fair market value of the property, a developer would purchase it for approximately $1.6 million. Assuming earnings of five percent in the Donor Advised Fund, Ben and his wife would then direct annual gifts of $80,000 to American Bible Society and other charities. Plus, they would make it a family project, inviting their adult children into the process of choosing how the $80,000 is allocated toward ministry organizations and projects. They are now setting a stewardship pattern that will impact their children, their children’s children and so on. What a great way to establish a family giving tradition!

“This dog’ll hunt!” Need he say anything more?

To learn more about Donor Advised Funds, contact the American Bible Society Regional Advisor in your area by calling 800-549-3328 or visiting our “Contact Us page.

*Name has been changed

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Dan Dorrill
Dan Dorrill

Dan Dorrill is an Estate Planning Advisor with American Bible Society, helping folks find ways of helping charities through effective gift planning, while improving their tax situations. Over his 29-year career, he has presided over several industry organizations, spending the first 20 years in private practice involving insurance, investments and estate planning.  Dan and his family reside in Tennessee where he enjoys performing jazz and training Arabian horses.

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